Vedanta presses Odisha govt for grant of bauxite ML to L&T

The aluminium maker has pact with L&T to source bauxite for its Lanjigarh refinery

Vedanta Resources Plc Chairman, Anil Agarwal, accompanied with L&T chief A M Naik, today met Chief Minister Naveen Patnaik to press for early disposal of L&T’s application for grant of mining lease for Sijumali and Kutrumali bauxite mines as both the companies have entered into a pact to operate the mines.

Vedanta intends to source bauxite from these mines for its Lanjigarh refinery, which is in dire straits following denial of raw material from the linked Niyamgiri deposits.    

“As per an agreement, we can source bauxite from L&T mines. The Chief Minister said such a proposal is under consideration and a decision will be taken soon in this matter,” said Agarwal, after his meet with Naveen Patnaik.

L&T had won prospecting license (PL) for Sijimali and Kutrumali bauxite mines in 1992. But two years later, after the expiry of PL, the state government denied ML to L&T since it had no end-use plant.

In 2005, L&T through a joint venture with Dubai Aluminium (Dubal) had proposed Rs 30,000 crore alumina refinery of three million tonne per annum (mtpa) capacity at Rayagada, 1.5 mtpa smelter project and a captive power plant (CPP). Though a special purpose vehicle (SPV) called Raykal Aluminium was formed for the purpose, the project remained a non-starter. Seven years later in 2012 when Dubal walked out of the SPV, Sesa Sterlite (then Vedanta Aluminium Ltd) bought 24 per cent stake in the project.

In a fresh application in 2012, L&T had requested the government to grant it mining lease citing Lanjigarh refinery of Sesa Sterlite as the end-use plant.

The government was dilly dallying over the decision to grant a mining lease to L&T, citing legal constraints that a PL granted for one plant cannot be upgraded to a mining lease for another plant. However, all the legal opinions, sought by the government in this regard, came in favour of L&T.

“The government has completed its exercise of exploring legal consultation. We are hoping a decision would be taken soon,” said a source present in the meeting.

L&T said the government has assured to take up the matter as soon as possible. “We are as much interested as Vedanta to complete the project. We hope a decision will be taken soon after the meet,” said Naik.

Both of them refuted the speculations that the state government was sitting over the application because of upcoming polls, as it feared any favour to the aluminium makers would disturb its vote bank base among tribals, who have voted against bauxite mining at Niyamgiri earlier.

Sijimali and Kutrumali mines, with close to 300 million tonne deposits, are located in Rayagda and Kalahandi districts, where the Niyamgiri mine is also situated. “I cannot comment about why the government is delaying in taking a decision,” said Agarwal.